UK anti-money laundering regulations do not explicitly include higher education institutions within their scope. This omission creates a “significant gap” in the implementation of the law, a new study suggests.
UK anti-money laundering regulations do not explicitly include higher education institutions within their scope. This omission creates a “significant gap” in the implementation of the law, a new study suggests.
Research conducted by Cardiff University, the University of the West of England, and the University of Reading has revealed a “significant minority” of higher education institutions are not providing staff and students with guidance on the risks associated with money laundering.
The study, published in the journal Criminal Law Review and presented in The Conversation, showed UK anti-money laundering regulations do not explicitly include higher education institutions within their scope. This omission creates a “significant gap” in the implementation of the law.
Dr. Henry Hillman, a lecturer at the University of Reading’s School of Law, stated that the study aimed to assess anti-money laundering procedures within higher education institutions, particularly focusing on international students who were identified as both potential money laundering risks and vulnerable individuals in the context of this issue.
The study analyzed the existing Money Laundering Regulations and found that universities were not obligated to establish countermeasures.
By examining responses to freedom of information requests sent to UK universities, the researchers identified a variety of approaches being used across the sector. The study suggests that a more consistent approach could be achieved by including universities within the regulated sector.
The research conducted Freedom of Information requests to 120 universities in the UK, with 110 of them providing responses.
The analysis revealed that 20% of respondents do not offer internal anti-money laundering training for staff, and 24% do not provide guidance to students regarding financial and organized crime risks.
Additionally, while 17 universities had stopped accepting cash payments during or after 2019 – 2020, 22 institutions still accept cash for tuition fees and accommodation.
Three universities each accepted over £1 million (about $1.25 million) in cash payments in 2019 – 2020, while a total of £12 million (about $15 million) in cash payments was accepted across 39 universities in the same year.
The research shows that most universities do not submit suspicious activity reports (SARs) to the authorities as required by current guidelines. These reports are essential for identifying and preventing criminal activity and ensuring that institutions are not liable for any wrongdoing.
Lead author Professor Nicholas Ryder, from Cardiff University’s School of Law and Politics, expressed concern over organized criminal groups increasingly exploiting higher education institutions and students for money laundering.
He noted that the sector’s response to this issue has been inadequately understood.
Dr. Samantha Bourton, Senior Lecturer in Law at the UWE noted that their research has identified instances of universities accepting suspicious payments from convicted criminals and corrupt Politically Exposed Persons.
Additionally, reported cases have shown how students sometimes allow their bank accounts to be misused by organized criminals, leading to negative consequences for their well-being and future career prospects.
“Despite these risks, our research revealed that there is significant disparity among higher education institutions regarding the implementation of established anti-money laundering measures. To address this issue, our paper recommends that universities are explicitly included within the scope of anti-money laundering regulations,” she said.
